The Future of Quality Management Is Business Success, Part 2
(July 20, 2020)
All articles in this series:
In part one of this series, I said that I want to help my colleagues use their ISO 9001 implementation as a profit center and to turn risk-based thinking into risk avoidance. To do this I will share a set of tools that help evolve quality management into business management.
These tools include:
• Evolving the requirements of ISO 9001's Section 4 from merely defining the context of the organization to working with senior management to create, implement, and make shared vision, mission, and values a cultural imperative
During the next seven installments, I will provide experiential data that make compelling cases for quality as a profit center and risk avoidance. I will also provide specific suggestions for incorporating both into each clause of the standard. The theme and objective will be to sunset the limited effectiveness of traditional quality management and create an enterprise-wide business management system that drives organizational excellence and shields companies from liability.
Starting with a look at Clause 4, each article in this series will present new tools for increasing return on investment (ROI), enhancing customer satisfaction, creating process excellence, and driving risk from an ISO 9001:2015-based quality management system (QMS). It will help implementers evolve quality management to overall business management.
Clause 4. Context of the organization
Clause 4 compels the organization to look objectively at both the internal and external issues that can impact the strategic objectives of the company. By systematically identifying every factor that can affect the successful operation of the organization, a matrix or process flow chart can be developed that will ensure that every critical factor in the business is identified, continually evaluated, and controlled.
Clause 4 goes on to require that the organization evaluate the needs and expectations of all “interested parties.” It exists to ensure that everyone, from employees to customers, suppliers, and shareholders, are in the loop in terms of their needs and expectations, and a that a channel exists for effective communications.
With influencers and interested parties determined and codified, the organization can more effectively determine the scope of the QMS. All these key inputs are necessary to build an effective process-based QMS.
The benefits are that senior management has formally defined processes whose outcomes can be measured and continually improved. The process owners, suppliers, and customers also have a baseline from which to interact with the organization.
4.0 and organizational excellence
4.0 and risk avoidance
4.1 Understanding the organization and its context
Clause 4.1 is a new requirement of ISO 9001. It compels the organization to evaluate internal and external influences that can impact the objectives and planning of the QMS. This includes all issues that are, and may be capable of, affecting these objectives and outcomes in the future
4.1 and organizational excellence
In examining external issues, this is the opportunity to involve each segment of the organization to brainstorm the known external requirements and regulations, as well as the changing technology, competition, and economic trends, and create a matrix that is continually monitored, updated, and used to invoke corrective action. As with all imperatives, they must have meaningful metrics tied to the key organizational objectives.
Also, compliance with regulations and statutes that are mandatory are almost always an overhead expense. The philosophy of organizational excellence is to find why the requirements exist and how you can turn them into a profit center.
4.1 and risk avoidance
Employing PESTLE analysis as a tool for determining external influences is a good first start in understanding the context of your organization. Learning risk avoidance in subsequent installments will compel you to examine each of the elements of PESTLE and inculcate risk assessments in each element.
While interaction with customers is discussed in other clauses, it is advisable to include customers into examining external issues. Foreseeable risks with customers must include assessing how customers can use your products and services badly or for the wrong purposes.
In understanding the organization, it will be advantageous to compare risk avoidance with traditional overhead risk management tools and requirements, and discard nonvalue-added processes.
4.2 Understanding the needs and expectations of interested parties
Clause 4.2 requires that the organization identify individuals and organizations within and without the company that can affect all aspects of operations and products/services. These may include customers, suppliers, employees, and shareholders. Also to be identified are regulations, standards, and legal issues that are requirements which must be followed in realizing the products and services.
Once all interested parties and regulations are identified, you must determine the needs, expectations, and requirements of each, and how the requirements will be enacted within the QMS.
4.2 and organizational excellence
4.2 and risk avoidance
4.3 Determining the scope of the quality management system
Traditionally, determining the scope of the QMS means codifying a framework based on 4.1 and 4.2. This framework must include all the requirements of the standard. It includes the processes that are mandatory for an effective QMS. It includes a scope statement that is required for certification.
4.3 and business excellence
4.3 and risk avoidance
4.4 Quality management systems and their processes
Traditionally, this clause defines the process-based organization and the interaction of the processes.
4.4 and organizational excellence
4.4 and risk avoidance
The context of the organization and organizational excellence
The context of the organization and risk avoidance
Author: Tom Taormina is a subject matter expert in the ISO 9000 series of standards.
Credit: This article has been written for and published in Quality Digest, 22 Jan ,2020